The massive humiliation dealt to Labor in the Queensland election was largely a test of voter dissatisfaction with the Bligh government. But coming on top of the electoral debacle for Labor in NSW one year ago, and with conservative gains in Western Australia and Victoria, the federal implications for the minority Labor government are devastating, not only for the next election but also for its policy agenda in the interim.

Labor’s style of governance – once dominant – is being rejected by the voters. The period of state politics dominated by moderate media-political savvy Labor premiers such as Bob Carr and Morris Iemma in NSW, Steve Bracks and John Brumby in Victoria, Peter Beattie and Anna Bligh in Queensland, Mike Rann in South Australia, Geoff Gallop and Alan Carpenter in Western Australia, is over.

The balance of political power has shifted decisively to the conservative governments in mining boom development states of Queensland, WA and NSW, the biggest state and the nation’s financial centre, now ferociously anti-Labor. And the conservative state governments have now accumulated enough power to flex their muscle against Labor’s policies, including the big federal mining and carbon taxes, signalling the beginning of a new era of federal-state relations.

The conservative states will inevitably wield their new-found power more aggressively in federal-state negotiations. Federal Labor will pay the price for failing to negotiate a tax reform agenda with the states over mining royalties. Premier-elect Campbell Newman says he is not against the mining tax, but is adamant Queensland must be paid back every dollar it earns in mining tax proceeds to spend on infrastructure, joining WA in arguing for a larger share of tax revenue for the state.

He also said yesterday he plans to “fight for the common cause” against federal Labor on issues such as the mining tax and the carbon tax, while WA Premier Colin Barnett signalled that federal Labor will have a much harder time trying to “impose things like changes in education, health and city planning. We might have seen the rise and fall of COAG,” he said.

However, none of the conservative parties have laid out compelling, market-focused economic reform blueprints.

Victoria has tipped towards conservatism, but premier Ted Baillieu, who last week announced he is looking at assets sales, like NSW premier Barry O’Farrell, is taking only cautious steps towards a pro-growth reformist agenda.

Mr Newman has no plans for further privatisations, yet it is vital that all the state governments move swiftly to get mature assets off their balance sheets so they can fund more infrastructure development – some of it user pays – in league with the private sector.

It is the states that have the responsibility to tackle the infrastructure backlog that is apparent throughout the country and also of implementing productivity, efficiency and quality improvements in their health and education services.

For her part, Prime Minister Julia Gillard will have to be more consultative in negotiations with the states to tackle issues such as housing, population growth and infrastructure development and she will no longer be able to push federally dictated reform outcomes onto the states as political authority has now moved so convincingly away from Canberra.

The drastic loss of Labor seats in Queensland guarantees the state party will remain out of government for probably a decade and suggests a terminal result awaits the Labor Party if Queensland votes similarly in the federal election.

The Greens also failed to gain traction in Queensland and did not muster even one seat. This suggests the electorate, at least in Queensland and perhaps federally, is becoming more wary of the party and its influence not just on development but also on the minority Labor government’s policies.

There are obvious parallels between the electorate’s rejection of former premier Bligh because of her “broken promise” not to privatise state assets, and Gillard’s “broken promise” not to introduce a carbon tax. But this is more than just the issue of broken promises being electorally toxic. Just as importantly, it shows parties must be upfront and transparent about their policy agenda, and try to convince the electorate of their necessity, if they want to win voters’ confidence.

Ms Bligh’s credibility was seriously damaged by her reckless and concocted smear campaign against Mr Newman’s family finances. Federal Labor has accused Opposition Leader Tony Abbott of running a negative campaign but has itself stooped to class warfare centred on blaming mining magnates for its botched mining tax. While Mr Abbott has an obligation to produce a set of policies and explain them, the Queensland result shows convincingly that vicious negative campaigns can backfire electorally.